Record revenue at Rangers but losses increase

 Rangers currently do not have a chief executive nor a director of football operations, while the chairman is only a temporary appointment.

Since Steven Gerrard was tempted by the riches of the Premier League, moving to Aston Villa in November 2021, Rangers have had three different managers, which has not helped matters, as they have all had their own playing styles, requiring much turnover in the squad.

Rangers legend Ally McCoist gave a damning assessment of last season’s financial results, “Those figures are really, really concerning. They’re trying to put a positive slant on it, but those losses, man, dear me.”

Ranger’s pre-tax loss shot up from £3.1m to £17.3m, despite revenue rising £4.5m (5%) from £83.8m to a club record £88.3m, as profit from player sales dropped from £23.6m to £5.6m. 

Rangers’ revenue growth was largely driven by higher gate receipts amd hospitality, which rose £4m (10%) from £40m to £44m, though there was also an increase in commercial, up £1m (7%) from £19m to £20m. However, broadcasting fell £1m (3%) from £25m to £24m, due to the failure to reach the Champions League group stage.

Southampton, the club that finished last in the Premier League in 2022/23, had £146m revenue, which was £58m more than Ranger’s club record £88m.  The English club earned less in both match day and commercial, while obviously receiving nothing from Europe, but all of that was obliterated by the £108m they got from the lucrative Premier League broadcasting deal, which was miles ahead of Rangers.

Unsurprisingly, Rangers’ £17.3m pre-tax loss is the worst financial result in Scotland by some distance, as the next highest loss is only £4.4m at Hearts. As a rule, Scottish clubs run a tight ship, so every other club reported losses below £4m or a profit.   Of course, the big two Glasgow clubs generate significantly more revenue than the rest of the Premiership, e.g. last season Rangers’ £88m was more than four times as much as the third highest Scottish club, namely Hearts with £20m.

Rangers’ small loss in the prior year owed a lot to their best ever profit from player sales of £23.6m, which was mainly due to the club record sale of Calvin Bassey to Ajax and the big money move of Joe Aribo to Southampton.  However, their profit last season was £18m lower at £5.6m with the largest sales being Glen Kamara to Leeds United, Fashion Sakala to Saudi club Al-Faha and Antonio Colak to Parma.

After two years of small losses, when they very nearly broke-even, Rangers’ £17m deficit last season was very disappointing. In fact, it is their largest ever loss outside those that they suffered in the seasons impacted by the COVID pandemic.  They have lost a hefty £109m in the last decade, including £68m in the four years up to 2020/21.

The good news is that the club is now free of any litigation claims for the first time in over a decade following various settlements, though these have been rather costly.

Rangers earned €20.2m TV money from Europe last season. They were defeated by PSV in the play-off round for the Champions League, but that was still worth £5m. They then earned €15.2m after dropping down to the Europa League, where they reached the last 16.   Rangers earned €20.2m TV money from Europe last season. They were defeated by PSV in the play-off round for the Champions League, but that was still worth £5m. They then earned €15.2m after dropping down to the Europa League, where they reached the last 16.

After rising seven years in a row, Rangers’ wage bill fell £3m (4%) from £64m to £61m, as the first team wage bill was reduced to “a more sustainable level”.    Indeed the club said that wages are anticipated to fall by a further £6m this season after the summer 2024 transfer activity. Basically, the high earners have left, replaced by younger players on lower salaries.  As a result, their £49m squad cost overtook Celtic’s £47m, while the next highest club in Scotland’s top flight was Hibernian’s £4.9m, followed by Hearts £4.7m and Aberdeen £2.9m.

Funding and ownetship

Rangers business model in recent years has been highly dependent on money from their investors, adding up to £103m in the last decade. Moreover, this funding has been increasing, so £71m was provided in the last five years, compared to £31m in the preceding 5-year period. There is little sign of this diminishing in the short term, as the directors have approved a plan to raise an additional £8.6m of equity plus another £4m of debt funding this season.

There have been a few whispers of takeover interest in Rangers, though this is complicated by the shares being split among quite a few different owners. The largest stakes are currently held by Dave King 14%, Douglas Park 12%, George Taylor 10%, Stuart Gibson 10% and Julian Wolhardt 8%.  One report suggested that director John Halsted, who specialises in equity investment, might make a major cash injection to increase his 5% stake.

Rangers have made a lot of progress on the pitch since the current board took control in late 2015, but this has required significant investment from the directors.

The large loss last season showed how vulnerable the club is to a reduction in profits from player trading, so the focus on controlling costs is understandable. That said, it will make it more difficult to challenge Celtic.  The leadership issues off the pitch will not help, nor will this season’s failure to reach the Champions League play-off round, though Rangers are doing OK in the Europa League.